All posts tagged Merck & Co

Life “is a cost benefit analysis”—a fact seen in news that France’s Sanofi-Aventis and Merck & Co of the U.S. have abandoned plans to combine their animal health businesses.

The linking of Sanofi’s Merial with Merck’s Intervet business would have surpassed Pfizer in animal-health sales, even after any divestments.

But problems trying to balance demands from anti-trust regulators and satisfying potential buyers of assets that needed to be sold off do the deal—while preserving the underlying business itself—proved too much, and the drug makers threw in the towel after a year of efforts.

The halt in development by AstraZeneca of its most advanced follow-up compound for respiratory syncytial virus (RSV) infection might spur interest in a handful of earlier-stage projects. Developing a vaccine for the disease remains a significant long-term goal for the biotech industry.

The discontinuation of motavizumab changes the playing field in this potentially lucrative disease area, and makes Alnylam Pharmaceuticals Inc. and Cubist Pharmaceuticals Inc.’s ALN-RSV01, currently in Phase II trials, the most advanced RSV therapy in development.

A successful outcome in the study would surely prompt Cubist to consider buying out its junior partner, and might even renew speculation about a larger company buying out Cubist. Much earlier in development, meanwhile, MicroDose Therapeutx Inc, Novavax Inc. and NanoBio Corp. — the last two working on vaccines — offer possible licensing opportunities.

Of course, any potential partner — or indeed acquirer — would need to look far ahead, given that research here is still at a very early stage. Moreover, AstraZeneca is still the undisputed leader in this space, and won’t give up this position easily.

“It’s not lupus. It’s never lupus.” The words of Dr. Gregory House in the hit TV drama House M.D. probably did more to burn the complex autoimmune disease on the public consciousness than any medical awareness campaign.

But there’s a serious point: While frequently put forward, a diagnosis of lupus rarely seems to turn out correct. And despite some very bullish forecasts, decisions on deal making and financing have so far been taken almost blindly because no one really knows just how large the lupus market is, or how big it could become in future.

Meanwhile, key projects that have already been licensed to large partners, such as Zymogenetics Inc‘s atacicept, Trubion Pharmaceuticals Inc‘s SBI 087 and ImmuPharma‘s Lupuzor, should find a surer footing towards funding and approval, although given the historic risks inherent in lupus drug development, it’ll be some time before any big pharma partners pull the M&A trigger and decide to buy their junior partners outright.

Defining the actual size of the lupus market will be one of Benlysta’s most important roles.

[This is a guest post by Steve Goldstein. The original article was published on MarketWatch]

A recent downturn in the value of Swiss drug maker Novartis is making a heavily-criticized bid for eye-care-products maker Alcon even worse.

Bloomberg

Woman uses Alcon eye drops

Novartis in late January offered to swap 2.8 of its own shares for each share of Alcon’s it didn’t already own.

At the time, that valued each Alcon share at $153, and using Tuesday’s closing prices for Novartis, the bid is worth $147.53.

Alcon closed Tuesday at $159.95, implying that the market expects a better offer from Novartis.

The offer has been criticized because Novartis isn’t offering as much to minority shareholders of Alcon vs. what it is willing to pay Nestle.

Novartis is paying Nestle $180 per Alcon share to grab a 52% block in the eye-care firm in a deal that is expected to close in the second half of the year. Daniel Vasella, chief executive of Novartis, told analysts in January that the difference reflects the fact that with the Nestle transaction, it will receive control of the company.

But Alcon’s independent directors have called the price “inadequate,” said it was based on “fundamentally flawed” analysis and that the offer shows “profound disrespect for Alcon’s minority shareholders, many of whom are employees who, for more than 60 years, created the value in Alcon.”

Big pharma companies like Merck & Co have long looked to biotechs for new drugs to restock pipelines and bring revenues tomorrow, making biotechs the perennial subject of takeover chatter.

But the recent setbacks at Britain’s Vectura Group and Antisoma underscore the importance of a cautious licensing strategy, at least when it comes to loss-making, development-stage companies.

Vectura and Antisoma both have Novartis as a key development partner. And, while they may have seemed ripe for takeover, there seemed to be little precedent to suggest that Novartis was about to pull the trigger.

And so it has proved to be.

Antisoma’s stock plunged 75% March 29, after ASA404, one of its lead projects, failed a Phase III lung cancer study. Vectura, meanwhile, lost a less-catastrophic 24% of its value after Novartis decided that it did not, after all, want to pursue U.S. development of a major generic asthma drug.

A number of early-stage biotechs are likely to beat a path to Merck’s door with prospective licensing deals. Looking at Merck’s current areas of research, for instance, NeuroSearch of Denmark and Vernalis of the U.K. have neuroscience projects that might be of interest to the U.S. firm, while Sweden’s Medivir could push for deals on its antivirals and cardiovasculars that are in early studies.

Vaccines have provided fertile ground for deal making in recent months, but the sector only has a few key players–and only five of the so-called ‘big pharma’ companies hold significant market share.

With big pharma facing looming patent expiries and serious R&D productivity problems, it’s clear why some companies have decided that vaccines are so attractive. Those that arrive late at the party might find that M&A is the only way to compete…

[Read on over the jump for an interview with Thomas Lingelbach, chief operating officer of Intercell, an independent vaccines company focusing on infectious diseases.]